This is not unlike the place that the word you holds. In standard English, you is both singular and plural; it always takes a verb form that originally marked the word as plural, such as you are. You is also a gender neutral pronoun with similar grammatical constructs to they.

Though singular they is widespread in everyday English and has a long history of usage, debate continues about its acceptability. Regarding usage, the Chicago Manual of Style notes:

On the one hand, it is unacceptable to a great many reasonable readers to use the generic masculine pronoun (he) in reference to no one in particular. On the other hand, it is unacceptable to a great many readers either to resort to nontraditional gimmicks to avoid the generic masculine (by using he/she or s/he, for example) or to use they as a kind of singular pronoun. Either way, credibility is lost with some readers.[2]

With the 14th edition (1993), the Manual briefly revised its neutral stance to actually recommend "singular use of they and their", noting a "revival" of this usage and citing "its venerable use by such writers as Addison, Austen, Chesterfield, Fielding, Ruskin, Scott, and Shakespeare."[3] However, regret regarding that printing is expressed at their website; and with the current 15th edition (2003), they have returned to their original neutral position.[4]

Singular they does, in fact, remain morphologically and syntactically plural (it still takes plural forms of verbs). Talmy Givón (Syntax: an introduction, 2001) even provides "If anybody did that, they'd be insane" as an example of non-referring, pluralanaphoric they.[1] However, singular they is more often considered to be semantically indeterminate either in number, or in gender; and the usage is described as generic they or epicene they.